Qualcomm restructures to preserve patent portfolio

Qualcomm today announced a new corporate structure that is intended to help preserve the chipmaker's patent porfolio.

The firm will now be split between Qualcomm Incorporated – which will include Qualcomm Technology Licensing (QTL), corporate functions, and "most" of Qualcomm's patent portfolio – and a new, wholly owned subsidiary, Qualcomm Technologies, Inc. (QTI), which will handle the firm's research and development and product and services businesses, including the semiconductor division, Qualcomm CDMA TEchnologies (QCT).

Qualcomm said the move does not mean it will spin off its QTL or QCT businesses. It is also not "in response to any third party actions or claims," the company said.

"Our internal reorganisation will provide even greater protection for our industry-leading intellectual property portfolio as our products and services businesses seek to accelerate innovation and deliver our products to market quickly," Dr. Paul E. Jacobs, chairman and CEO of Qualcomm, said in a statement. "We are confident that this change to our corporate structure will be accomplished with little to no disruption to employees and customers."

With the new organisation, QTI and its subsidiaries will own patents related to open-source software contributions from QTI and its subsidiaries. All other patents will be owned by Qualcomm Incorporated.

"QTI and its subsidiaries will have no rights to grant licenses or other rights to patents held by Qualcomm Incorporated," the company said. "There will be no changes to the intellectual property that is currently owned by Qualcomm Innovation Center, Inc., which works closely with the open source community to accelerate the advancement of the wireless industry as a whole."

Qualcomm said the changes will go into effect in the first fiscal quarter of 2013.

According to patent blogger Florian Mueller, Qualcomm's move is simply a "precautionary measure," but it shows how protective the company is about its patents and how concerned it is about the implications of open-source licenses.

"Qualcomm knows that its patents are the crown jewels of the company and is concerned that it could lose its ability to enforce some of those crown jewels against third parties just because of the patent-related pitfalls involved with open source licensing," Mueller wrote in a blog post. "This would adversely affect Qualcomm's licensing business and its shareholder value."

Those who distribute software under open-source licenses risk losing their ability to enforce patent rights against others, Mueller continued. "For a company like Qualcomm it would be devastasting if some of its patents could be used on a royalty-free and largely or entirely restriction-free basis just by incorporating certain open source code with which Qualcomm is involved," he wrote.